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AAP Handbook Review Flashcards

1
Q

ACH Operator receives an ACH Credit item with a stale effective entry date. When will settlement occur?

A

The next available settlement opportunity

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2
Q

Written and signed or similarly authenticated authorization are REQUIRED for what types of debit transaction codes?

A

WEB, POP, PPD

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3
Q

How many days does the RDFI, upon receipt of the federal government’s Notice of Reclamation, have to react to prevent future withdrawals?

A

1 business day

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4
Q

Which ACH Participant warrants an Entry is authorized?

A

ODFI

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5
Q

What two types of standard entry class codes can be used for both Zero-Dollar entry and payment-related information?

A

CTX & CCD

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6
Q

Which regulation requires 10-day notice when there is a change in dollar amount of original authorization for ACH entry?

A

Regulation E

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7
Q

Which of the following SEC Codes permits the orignating party 9,999 Addenda Records of remittance information with entyr? - ENR -WEB -COR

A

ENR

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8
Q

What is the warranty made by the ODFI to the RDFI?

A

The originator has no knowledge of the Receiver’s revoked authorization

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9
Q

What are the characteristics of a CTX entry?

A

A credit or debit transaction for corporate payments

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10
Q

An IAT return entry must include:

A

seven mandatory addenda records plus additional 8th with return code and original entry trace number

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11
Q

What is the timeframe to return credit entry upon notification from receiver that it is not their credit?

A

Available to the ODFI no later than opening of business on the second banking day following receipt of notification of refusal from Receiver.

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12
Q

In an ACH file, which record contains the Company Name, the Standard Entry Class Code and the Effective Entry Date?

A

Batch Header Record

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13
Q

What mandate relates to the EFT mandate?

A

The Debt Collection Improvement Act of 1996: Title 31 CFR Part 208: All Federal Government non-tax related pmts must be electronic.

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14
Q

Per UCC4A, a contract between the F.I. & customer may limit liability to the bank unless:

A

The F.I. demonstrated “lack of good faith or failure to exercise ordinary care”

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15
Q

Commercially reasonable security procedures are addressed by which agreement?

A

Uniform Commercial Code Article 4A

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16
Q

When is it appropriate for an Originator to use a Standing Authorization?

A

To authorize payment to a company that will receive future payments, but not on a set schedule.

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17
Q

The Company Name, in all batches except IAT, is:

A

Mandatory

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18
Q

How long is copy of check required to be kept for RCK entry? If requested, how long does the ODFI have to provide a copy of the item to the RDFI? According to what rules?

A

7 years, when requested in writing from RDFI, copy (including if it was paid, if it was paid) from ODFI to RDFI within 10 banking days according to NACHA Operating Rules

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19
Q

What two banking industry conventions made the check payment system more efficient?

A

Routing Transit Number (as adopted by the ABA) and MICR

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20
Q

ACH Transaction Flow within ACH Network?

A

Originator, ODFI, ACH Operator, RDFI, Receiver

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21
Q

What format (sec) must a Health Care EFT Transaction comply with?

A

CCD with one Addenda Record

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22
Q

Upon written request from ODFI, how long does the RDFI have to send a copy of a WSUD?

A

10 banking days

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23
Q

Designated Data in NACHA Operating Rules require the ACH Operator provide what type of data to NACHA from time to time?

A

Data derived from return entries or extended return entries

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24
Q

RDFI is required to make funds available for withdrawal in Receivers account for credit Same Day Entries received in 3rd processing window by . . .?

A

End of RDFI’s processing day

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25
Q

Regulation E does not apply to what ACH products?

A

RCK, CCD, CTX

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26
Q

What types of consumer checks under $25k may not be converted to an ARC, POP, or BOC entry?

A

Checks drawn against lines of credit

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27
Q

What regulation implements Expedited Funds Availablity?

A

Regulation CC

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28
Q

What is the timeframe to return an unauthorized ACH corporate entry?

A

Available to the ODFI no later than opening of business on the second banking day following settlement date of original entry

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29
Q

How many days does an Originator have to notify a consumer Receiver of a change in scheduled debit date of an ACH entry?

A

7 Calendar Days (not BANKING days)

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30
Q

The Monetary Control Act of 1980 allowed?

A

Private sector ACH Operators to compete with the Federal Reserve

31
Q

For ARC, a check that is used as an Eligible Source Document must have what four characteristics?

A

Contain a preprinted serial number, be $25k or less, be completed and signed, contain a complete MICR line.

32
Q

What is the purpose of the Federal Reserve Operating Circular No. 4? What do they establish?

A

Their purpose is to govern the clearing and settlement of ACH entries.
Process to monitor ongoing payment system risks & Cutoff items, settlement dates and allowances for extensions.
[NOT return reason codes for disputed entries].

33
Q

Upon request of a Receiver, an RDFI must provide all payment-related information for CCD, CIE, CTX, and IAT entries to non-consumer accounts by:

A

Opening of business on the second banking day following the settlement date of entry.

34
Q

Minimum requirements in an Origination Agreement between ODFI & an Originator/Third Party Sender?

A

The right of the ODFI to terminate the agreement for breach of the Rules & The right of the ODFI to audit the Originator/Third-Party Sender’s compliance with the Origination Agreement & Nacha Operating Rules

35
Q

When is settlement considered final for ACH credit entries?

A

On Settlement date

36
Q

Within what timeframe must an ODFI reduce the Unauthorized Entry Return Rate of an Originator or Third-Party Sender below rate of return threshold after being instructed by NACHA?

A

30 days

37
Q

FedWire is subject to what regulations?

A

Regulation J & Regulation CC

38
Q

Check processing order?

A

Payee-BOFD-Correspondent Bank-Paying Bank

39
Q

The use of strong data security, access limitations, authentication, encryption, tokenization, KYC, KYCC, dual control, and separation of duties mitigates which type of risk?

A

Fraud

40
Q

Individual name field is mandatory for:

A

TEL & WEB

41
Q

Who is the Acquirer in the card network system?

A

F.I. that represents merchants in accepting POS transactions

42
Q

An ACH Operator acting as a Gateway must not process:

A

Any debit inbound IAT entry, except for reversing entries

43
Q

Which provision of UCC Article 4A can be varied by agreement (with disclosure to Originator) according to UCC Article 4A?

A

Choice of Law

44
Q

A Non-Consumer Originator, that is not a F.I., must protect the acct numbers used in Entries by rendering them unreadable when stored electronically if their annual ACH volume exceeds:

A

2 million transactions

45
Q

Which field contains the reason for payment as required by OFAC for IAT entries?

A

Transaction Type Code Field

46
Q

What type of SEC code is subject to UCC 4A?

A

CCD Credits

47
Q

How long after receiving notice from NACHA does F.I. have to respond to notice for exceeding unauthorized returns for one or more Originators or Third-Party Senders?

A

10 banking days via a traceable delivery method explaining reason(s) for cause

48
Q

Is the ACH Network governed by Regulation J?

A

NO

49
Q

Is the ACH Network governed by Regulation D & UCC4A?

A

Yes

50
Q

Federal Government Benefit ACH Payments are governed by which regulation?

A

31 Code of Federal Regulation Part 210

51
Q

How many times may a NSF debit entry be reinitiated?

A

Can be reinitiated up to two more times within 180 days after settlement date of original entry

52
Q

Which party represents merchants in the processing, acceptance and settlement of POS transactions:

A

Acquirer

53
Q

ODFI ACH Origination Agreement for its business customers (Originator) must include:

A

Financial Institution’s restrictions on the type of entries that may be originated.

54
Q

Reg E defines specific requirements for:

A

Timing Requirements for disclosures and dispute resolution (NOT Corporate electronic funds transfers)

55
Q

Adrian’s Slurpy Shoppe uses Send Money Now to process their payroll and has an ACH Origination Agreement with ABC Bank.. In this situation, Send Money Now is a:

A

Third-Party Service Provider

56
Q

Reversing file, and if necessary, a correcting file must be transmitted to the ACH Operator within:

A

5 banking days after settlement date of the erroneous file and within 24 hours of discovery

57
Q

RDFI timeframe to transmit NOC to an ODFI?

A

Within 2 banking days of settlement date of the entry to which NOC relates, except due to merger/acquisition etc.

58
Q

Verbal stop payment order will cease to be binding after how many days?

A

14 days

59
Q

Which federal regulation requires 10 day notice before scheduled entry date for a change to the amount on consumer acct?

A

Regulation E

60
Q

How long does a copy of the check for an XCK entry need to be retained?

A

6 Years

61
Q

Quest Operating Rules put forth the requirements for the distribution of which types of payments under the Quest service mark?

A

Federal and State Government Payments

62
Q

In which record is the Standard Entry Class Code found?

A

Company Batch Header Record

63
Q

How can a F.I. officially notify a federal government agency of the death of a federal government benefit payment recipient?

A

By returning a post-death benefit R14 or R15

64
Q

According to Regulation E, how many days prior notice is required when there is a change to the initial disclosures which results in greater consumer liability (ex. ATM fee goes up)?

A

21 days

65
Q

Which entity is required by the NACHA Operating Rules to enter into an agreement with a Sending Point?

A

ODFI

66
Q

In which ACH record will you find the addenda record indicator?

A

Entry Detail Record

67
Q

Timeframe to update NACHA third-party sender registry following termination of relationship with F.I.?

A

45 days

68
Q

___?___ supports remittance information and other messaging?

A

RTP (Real-Time Payments)

69
Q

If the effective date of a batch entry is left blank by the ODFI, the ACH Operator will insert the settlement date as:

A

the next available settlement opportunity

70
Q

How long is a F.I. required to retain a copy of the WSUD?

A

1 year (ACH operating rules)
2 years (Reg E)

71
Q

NACHA Operating Rules require that each ACH Operator retain a record of all entries for at least?

A

One Year from receipt of transmittal of the entry

72
Q

Merchant does not want to retain a copy of documents or their images to process payments but still wants to be able to accept checks, what product should she use?

A

POP (Point Of Purchase)

73
Q

Credit & Charge Card payment path

A

Transmitted from the merchant POS, then to acquirer, then network switch, and then to the financial institution or organization (ex. issuer’s pmt processor) authorized to act on behalf of the issuer.

74
Q

List the 4 Service Class Codes (Series 200-299). What do they stand for, where is this located in ACH file?

A

200: ACH Mixed Debit & Credit Entries
220: ACH Credit Entries Only
225: ACH Debit Entries Only
280: ACH Automated Accounting Advice
Located in Company/Batch Header & Control Records.

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